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Telstra Health:Approaches to digital healthcare leveraging agile and lean MethodsBackground

This paper casts light on the evolving digital health sector, critically evaluating Australian full service operator Telstra’s activities in this space. The paper takes observations from a recent study undertaken with Telstra Health, Mindshifts Intelligence and STL Partners to consider the operators digital health strategy in the context of digital transformation. The paper develops on the work undertaken in this study with the addition of a proprietary evaluation model developed by Mindshifts, which quantifies the antipodeans giant’s performance using its own defined criteria for success. Summary During 2016 STL Partners and Mindshifts intelligence completed a number of interviews with Telstra Health, the business unit within Telstra charged with developing a stand-alone health service offering. These interviews and subsequent analysis were designed to evaluate the operator’s performance in the evolving digital health sector and to consider these developments with the context of digital transformation; the accelerating transformation of business activities, processes, competencies and business models enabled by digital technologies.

IntroductionTelstra Health was officially launched in 2014. Immediately from launch its targets have been optimistic with the units Managing Director, Shane Solomon, stating that he realistically expected to see revenues of AU$1 billion revenue per annum by 2020.

To reach this target Telstra health faces multiple challenges on multiple fronts ranging from negative customer perceptions of telcos as healthcare providers, to technical integration challenges like incorporating health records and medical diagnostics applications.

Telstra has sought to tackle these challenges by creating a homogenised digital health offering that incorporates full support for all the features health customers might need and looks to identify and solve the main customer pain points facing digital health users. It has underpinned this approach by exploiting agile process management and lean techniques as a mechanism to tackle the dynamic and continually changing characteristics of health in the always connected, network economy.

Telstra’s Buying SpreeDuring 2015 Telstra invested $1.2 billion in acquiring business operations to strengthen its core business sectors and move into new business areas. One of these sectors has been healthcare where the operator has made substantial investments to both, acquire industry leading service providers, and develop its image as a health service provider.

Chart 1: Telstra Acquisitions and Collaborations

Company Type Ownership Price Paid Start Date

Entra Health Systems Exclusive Reseller N/A N/A 2009

HealthConnex Acquisition 100% $44m 2013

FRED IT Investment 50% $50m 2013

Health Engine Investment 30% $5m 2013

IP Health Investment 40% Est. $1m 2013

TELUS (iScheduler) Exclusive Reseller N/A N/A 2013

Emerging Systems Acquisition 100% $15m 2014

iCareHealth Acquisition 100% $26m 2014

Orion Health Group Investment 2% $18.62m 2014

ReadyCare Joint Venture 87.5% N/A 2014

The George Institute Research Partner N/A N/A 2014

Get Real Health Exclusive Reseller N/A N/A 2014

Anywhere Healthcare Acquisition 100% N/A 2015

Cloud 9/Coud Med Acquisition 100% $19m 2015

Dr Foster Acquisition 100% Est. $50m 2015

Health IQ Acquisition 100% N/A 2015

Medinexus – Acquisition 100% $4m 2015

EOS Technologies Acquisition 100% N/A 2015

The First Obstacle: Telstra is not a Health Provider

In the sectors Telstra has targeted it has faced challenges including customer perceptions of the Telstra brand - what is stands for and what it provides. This brand perception challenge has been particularly stark in the health care sector where customers have quite reasonably asked – how can a ‘telco’ provider be a ‘healthco’ provider.

This reticence is based around the serious nature of health care and concerns relating to a telecom operator being a provider of a potentially life-saving service. Telstra Health sought to silence this challenge right from the beginning acquiring some of the most well respected healthcare service provider’s including health service performance analytics provider Dr Foster and remote GP consultation service ReadyCare. By acquiring best in class provider’s Telstra sought to provide best-in-class services to patients and healthcare practitioners providing services to them.

Criticism of Telstra as a healthcare service provider has not just come from patients and potential end-users. The healthcare industry has been a major detractor highlighting the incompatibilities between a commercial network provider’s business model and the concerns of the health industry to provide the best care possible. The argument follows that Telstra Health would consider profits over everything else and inevitably corners would be cut. Telstra tackled this problem by forging close relations with public and private health care bodies, advisory boards and experts in the field. By instigating a project of industry expert integration with its digital healthcare services the operator has successfully shown its commitment to achieving clinical excellence and not cost-cutting corners. Telstra compounded this enterprise by forging close ties with existing professional bodies, launching best-practice initiatives and setting up clinical excellence panels and working groups. Perhaps the best known example of this is the ReadyCare Clinical Advisory Panel, developed by Telstra to oversee the creation of guidelines and ongoing guidance for remote patient monitoring. This panel has counted a former president of the Royal Australian College of GPs and President of the Australian College of Rural and Remote Medicine as members, bringing much needed status and a ready-made reputation for the operators’ activities in this space.

The second obstacle: Telstra is not a Digital Health Provider

Telstra’s acquisition of leading players in the health service provisioning space and its exploitation of industry expertise were ideal approaches to position the telecoms service provider as a healthcare provider. Its next challenge lay in exploiting the advantages of digital to tackle the challenges facing healthcare. These challenges are well known and centre upon the increasing cost of healthcare; driven by an aging society, and paradoxically the increasing longevity of life, and the requirement to contain core operating costs while seeking out new revenue streams.

The major selling point of digital is the fact it can be delivered anywhere, at anytime and ostensibly with a care provider that is remote (not in the same room). Ranged against this ideal is the legacy of health systems that are based on static, in-person diagnosis, treatment and ongoing care (face-to-face diagnosis and treatment). These legacy features permeate all levels of existing health care approaches from how services are provided, to how ongoing treatment is delivered; by a real- person, in a clinic, pharmacy or hospital. Underlying this approach is the historical framework of diagnosis, geared to reactive, static, measured and deliberate activities. These features are almost the complete opposite of digital health approaches, characterised by an approach that is proactive, adaptive, flexible and quick to reach an outcome. Telstra’s solution to this challenge was to adapt its strategy, and the strategies of the service providers it had acquired, to a new framework based within the parameters of Agile service development and deployment. This framework-orientated approach was instigated across all levels with services being developed to take into account these features. This inclusive approach was identified as the best symbiosis of old and new, integrating the best features of digital; its flexibility and spontaneity, and retaining the best of the old; services built around interactivity. By adapting its health service development process and the overall structuring of its health unit in this way Telstra was able to tackle the problem of costs, improving the efficiencies of providing health care services, as well as containing core operating costs and seeking out new revenue streams. It is perhaps helpful to provide an illustrative example to demonstrate

this. Let’s take remote monitoring and diagnostics, or for that matter a video-call with a remote health care worker. Both these activities are enabled by a digital healthcare platform and both can substantially reduce the cost of providing care to non-emergency patients. This in turn helps the containment of core operating costs. Likewise both these scenarios open the potential for new revenue opportunities. These might include innovative tie-ins with insurance companies were discounts on premiums are provided if patients opt to control their illness through remote monitoring. Alternatively pharmaceutical companies might be able to use the health data retrieved through the millions of potential users of digital health services, to analyse and identify disease risk factors and market new medicines to patients that might benefit from proactive treatment (preventing the disease before it starts). In a connected digital world this data is centralised in a single place and can be analysed. From a purely commercial standpoint services and products can be developed, productised, and released to a global market almost instantaneously through digital channels, which tackles the need to seek out new revenue streams.

Agile - or more precisely - Scrum to the rescue?

Telstra leveraged Agile methods to satisfy both the old service features of health: direct interaction between patient and healthcare provider, and the new capabilities of digital services: flexibility, adaptation and rapid service provisioning. This was achieved by integrating features of Scrum, a variant of Agile orientated toward product and service development that originates from the software industry.

A defining principle of Scrum is its acknowledgment that during the production or service development processes the user, or customer, can change their minds regarding what they require, wish for, or even need a service to do. In Scrum development this is known as ‘requirement volatility’. To reduce the problems such volatility creates Scrum looks to learn and adapt during the process of development, using an empirical model of service/product creation that focuses on the speed by which these adaptations can be implemented. Adaptations can also include evolving technologies or developing market conditions. By adapting to Scrum techniques with its health offering Telstra has sought to prepare for the adaptations of digital health - as a new and unknown market opportunity - and pre-plan for the ‘requirement volatility’ of digital health service users

Telstra has visualised this approach by defining its business strategy in the context of six healthcare pain points. These ‘pain points’ are also the major challenges facing the health industry that the operator feels would benefit the most from digital approaches.

Figure 1: Telstra Digital Health approach areas

Telstra’s acquisition and service development strategy has been defined by these six areas, with the operator seeking to test the validity of any new acquisition or new product development by considering how it fits within these approach areas. In this context the operator has positioned itself as an enabler; occupying the role of service integrator and full service solution provider, in each of the six sectors identified as digital health service business opportunities.

These six areas incorporate specific challenges facing health where a defined solution can be provided e.g. improving healthcare admissions processes by connecting patient information over the cloud. It also includes less defined areas where digital can provide an advantage e.g. empowering users and increasing consumer control by incorporating self-care; self registration, and/or diagnosis capabilities.

Evaluation of achievement - Monitoring Success in Agile

An additional feature of agile methodology is the evaluation and monitoring of success. The aim of monitoring, evaluation and learning (MEL), is to identify improvements that can be exploited to improve, advance and develop services or products. Telstra’s health services are too new to be usefully measured by normal evaluation methods; number of subscribers, revenue generated, reduction in churned customers, and consequently it has developed its own evaluative process that considers the number of services that have launched in its six digital health pain point areas. This evaluation method has not been formalised, much less described to any great degree by the operator. When Telstra was asked to define its criteria of success spokespersons responded that ‘it was the degree to which they were tackling the six healthcare pain points’. There was little additional explanation of the actual methodology involved to achieve this.

Using these evaluation criteria as a starting point, Mindshifts Intelligence sought to progress Telstra’s evaluation project, using the operators own defined criteria for success (its six healthcare pain points). By considering the direction and emphasis of Telstra’s healthcare investment (which features it is concentrating upon) and evaluating these services by considering the capabilities they provide, it was possible to provide a measurement of success. The scale of success was defined by developing a scale of achievement, related to how Telstra has tackled the health challenges it has identified, and by evaluating the services Telstra has opted to develop and those it has opted to discontinue.

To achieve the output conclusions, shown in figure 2 (below), a qualitative weighted score was ascribed to each of the current services Telstra Health offers. This score was generated by considering relevance of each service to each of the six health defined pain points. This relevance criterion was generated by looking at each pain point and creating a scenario describing it. The scenario’s considered multiple criteria including, the potential customers who might use the service; enterprise users, patient consumers, features that would improve the particular pain point; reducing complexity, increasing speed by which the service can be accessed or data transferred, what are the financial considerations; has the service or approach a potential to reduce costs for the end-patient/user or customer (government and/or enterprise), how much does the service cost to provide, and what is the financial impact on the end user.

By reviewing the data in this way it is possible to evaluate Telstra’s health acquisition strategy and service development performance. This fits neatly with agile methodology, in providing a view of Telstra’s service offering at a particular instance in time - the astute student will remember scrum methodology is built around short activity sprints and periods of evaluation of project advancement. This process can be repeated as additional services are developed and/or acquisitions made, which fulfils the requirement for monitoring.

Figure 2: Evaluating Telstra Health’s Service Output

Mor

e ap

plica

ble

0 10 20 30 40 50

ConnectivityIntegration

Admissions

Pharmacy

EfficiencyConsumer control

Less

appl

icabl

e

Telstra health Services considered for evaluation purposesArgus Arcus Clarity

Clinical Workbench/Verdi Communicare Connecting Care Worker

ConnectingCare Messaging Emerging eRx

eRx Express Fred Dispense Fred Office

Global Comparators HealthEngine Medinexus

MyCareManager MyHealthPoint Quality Investigator/Doctor Foster

Spine TCM

Considering the outcomes of the evaluation model it is clear that at this early stage Telstra’s digital health offering has concentrated on its core strengths, namely connectivity enabled through its network infrastructure and services and its capability to connect users, service providers, services themselves and health infrastructure and service platforms. Concentrating on these core strengths and capabilities has enabled improvements in health service data integration, in administration

processes and in the overall efficiency of digital health services provided to the end-customer. The more specialised procedural improvements, such as improving pharmacy processes by integrating patient records and electronic prescriptions, are less prominent. It is likely the specialist nature of such services will require a more considered approach. At this point Telstra has opted to focus on its strengths and pick the low hanging fruit.

For further information regarding this and other digital transformation projects currently ongoing, please contact Paul Merry (LINK) [paulmindshifts@gmail.com].